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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 78.25

+1.7%

10:33 AM EST

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To: Lizzie Tudor who wrote (61165)	8/29/2002 10:40:23 PM
From: Tom D	Read Replies (2) of 77400

Its a tired old issue that could knock up to 40% off the value of the NASDAQ MSFT would have had profits of $950M instead of $1.6B in the last quarter if they had expensed their options. What would happen to the valuation of that company if their earnings suddenly declined 40%? What would happen to the overall NASDAQ composite if some of the largest capitalized companies expensed their options? Would we have two sets of expectations for PE ratios--one for companies who expense options and one for companies who don't? Probably not. Some companies would have major declines in valuations. As I recall, expensing options was only going to cause a 2% decline in KOs earnings. So they can afford to piously come out in support of doing what is right. IMHO, this is an issue that is rife with hypocrisy. Everybody really knows that options should be expensed, but so many influential people would be impacted in negative ways by another major decline in the stock market that they are all trying to rationalize an indefensible argument. Tom P.S. You may think that Huey is barking incessantly on a tired issue, but I think his arguments are cogent and well-documented. Maybe you should just skip his posts if you think you have heard them before. But let others read and enjoy, without disrespecting the ideas. It is rather apparent that other people on the thread appreciate his contribution and are engaging in a serious discussion.

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